By Christopher Stiffler, author of “Economics In-Other-Words: What Your Boring Economics Professor Tried to Teach You”

I encountered a political yard sign that managed to argue both sides of a tax debate in just five words.

And there’s a lesson there about the 2026 ballot and Amendment 87, which would cut taxes for 97% of Colorado taxpayers (those with taxable income below $500,000) while raising roughly $2 billion annually to help pay teachers, keep rural doctors treating Medicaid patients, and expand access to full-day preschool. Taxpayers receiving a cut would save an average of approximately $176 annually. Of the new revenue, hundreds of millions of dollars would come from multistate corporations (the same ones that benefited from tax changes under the Big Beautiful Bill, which reduced Colorado’s corporate income tax revenue).

Yet voters are hearing plenty of deliberate inaccuracies.

And we’ve heard this before.

In 2013, when Colorado voters considered raising income taxes for schools, I was traveling the state giving presentations. We encountered a homemade yard sign with five spray-painted words:

NO NEW TAXS FOR SCHOOLS

The homeowner had distilled their position on education finance into five words, four of which were spelled correctly.

The missing E was actually doing a good job for the Yes campaign. (Thankfully, they’d chosen a slogan with relatively modest vowel requirements. Imagine GOVERNMENT EXPENDITURES DESERVE BETTER MANAGEMENT.)

It was a sign accidentally demonstrating the need for the very thing it opposed. Like protesting expanded public transit because you couldn’t find parking at the protest.

Thirteen years later, the opposition got more sophisticated. The spelling mistakes have been replaced by economic inaccuracies, and the people purposely making them to confuse voters have much bigger budgets.

Like this one: Opponents warn that higher corporate taxes will drive businesses out of Colorado.

But Colorado uses something called single-sales-factor apportionment, which means Colorado generally taxes multistate corporations based on the share of their nationwide sales made here.

Suppose Acme Corporation earns $1 billion nationwide, with 2% of sales in Colorado. Colorado doesn’t particularly care that Acme’s CEO lives in Dallas, its legal address is a filing cabinet in Delaware, and its corporate retreats occur somewhere with a suspicious number of palm trees.

Colorado says, “Nice organizational chart. You sold 2% of your stuff here.”

In other words, higher corporate tax rates aren’t much of an incentive to flee Colorado when fleeing Colorado doesn’t get you out of paying them.

And here’s what gets overlooked: Of approximately 68,000 corporations filing in Colorado, only 13,000 report taxable income above $500,000. Of those corporations paying more, 96% operate outside Colorado. Amendment 87 cuts taxes for a majority of C corporations.

We’re also warned that wealthy Coloradans will flee to Florida, where they’ll spend their remaining years keeping the pickleball industry solvent.

The myth that millionaires flee in large numbers from taxes is a lot like Bigfoot: People swear it’s true, but it never occurs when someone from the Census Bureau has their camera out. Fortunately, economists have studied this question.

One study examined New Jersey’s 2004 millionaire tax increase. The state lost approximately $16 million in revenue from departing millionaires while collecting $1 billion from those who stayed. That’s a pretty good trade.

In 2020, New Jersey raised millionaire taxes again. The following year, the number of tax returns reporting at least $1 million in income increased approximately 41%.

Perhaps the strongest evidence came from the 2017 federal tax overhaul, which capped deductions for state and local taxes. For someone earning $2 million, this increased the financial incentive to relocate to a no-income-tax state by roughly $60,000 annually.

If millionaires were going to flee, this was their moment. Instead, researchers found remarkably little movement. California experienced an estimated net loss of just 380 millionaires out of 81,000 attributable to the change.

Turns out wealthy households have businesses, spouses, friends, clients, grandchildren, and golf foursomes. Economists call this elite embeddedness.

They’re not spending weekends scrolling Zillow, muttering, “Honey, I found a way to save 3% in taxes. All we have to do is abandon our jobs, house, friends, grandchildren, pickleball partners, and Broncos tickets and move to Casper.”

There’s also the claim that Amendment 87 would raise taxes on Social Security benefits and military pensions. This is inaccurate. Under existing Colorado tax law, the deductions for qualifying Social Security and military retirement income remain in place. Amendment 87 doesn’t eliminate those deductions; it changes tax rates. In fact, approximately 99% of Coloradans over 65 and 99% of veterans, along with 95% of small businesses, fall below the $500,000 taxable income threshold. Apparently, the opposition is hoping voters will confuse changing a tax rate with eliminating a deduction. Which is a bit like claiming that lowering the speed limit also cancels your driver’s license.

Hopefully, understanding the actual economics will help Coloradans make informed decisions about the ballot measures. My recommendation is to vote YES on 87.

Don’t let millionaires scare you into voting against your own tax cut so they can avoid paying theirs. And don’t let the loudest, most inaccurate argument about someone else’s tax bill keep you from understanding your own. That way you’ll sound more smarter than you’re neighbors. After all, an educated electorate is the cornerston of democrocy.